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Wednesday, 05 February 14
MARKET INSIGHT - TASOS PAPADOPOULOS
 KNOWLEDGE TO ELEVATE
COALspot.com: Let's take a break from market prospects, numbers, order book etc. and shed some light on the conclusions of the Tribunals in two recently decided cases, namely "The Union Power" and "The Griffon", which any prudent Seller/Buyer should be aware of before entering into an MOA for a secondhand tonnage. In "the Griffon" case an MoA based upon NSF 93 had been signed on 1st May 2010 for the purchase of m/v Griffon. A deposit of 10pct (i.e USD 2,156,000) was payable within 3 banking days of signature; that is by 5th May, 2010. The deposit was not paid by that date and Sellers, on 6th May, 2010 cancelled the MOA as per their express contractual right and claimed the deposit. Buyers had accepted that their failure to pay the deposit was in breach of contract but argued that Sellers should only be entitled to claim "compensation for losses" (as per clause 13 ) and not the whole deposit.
The Court of Appeal confirmed that Buyers are liable for the amount of the (unpaid) whole deposit, if the MOA is terminated as a result of Buyers’ breach. This heralds a departure from the previously held view that under clause 13 of NSF 93, where a Buyer fails to pay the deposit under clause 2, Sellers "shall have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest" (which might be less than the amount of the deposit). During the arbitration it was argued that the damages recoverable by Sellers should be the difference between contract and market price which were said to be US$275,000; that is, substantially less than the deposit (i.e. USD 2,156,000). The Court however, concluded that Sellers are in fact entitled to claim the whole deposit in such circumstances.
Anyway, it would not make sense for Buyers to be able to put themselves in a better position than the one they would have been had they not paid the deposit. This case is a reminder to Buyers of secondhand tonnage that if they agree to pay a deposit, under standard NSF terms, they will lose the deposit if they fail to perform, even if Sellers suffer no loss. The case of "The Union Power" in turn, has caused us to re-assess the Sellers' obligation under clause 11 of NSF 93 (Condition on Delivery) and a different understanding of the terms "As is where is " and "As she was at the time of inspection". The MOA in this case, included clause 11 that stipulated that the vessel was to be “delivered and taken over as she was at the time of inspection, fair wear and tear excepted”. When the dispute arose, the buyers argued that a term as to satisfactory quality was to be implied into the MOA by way of s.14(2) of the Sale of Goods Act 1979 (SOGA). Sellers argued that the provision of clause 11, that the vessel was to be sold “as she was”, was inconsistent with implying such a term. The Commercial Court decided in favor of the Buyers, concluding that "class does not tell you the quality of the vessel, which is why the independent implied term as to satisfactory quality is required".
As a result, the effects of the expressions "As is" or "As is where is" no longer exclude the right of Buyers to claim for damages for breach of implied “quality” but only to exclude their right to reject the vessel and not take delivery of her as per the terms and provisions of the MOA. In my view, the above decision is contrary to the commercial common sense and market understanding that has been the basis for thousands of deals over the years.
However, it is worth mentioning that the new NSF 2012 includes wording under Clause 18 which excludes the SOGA regime. Ultimately, what matters is whether the parties have used express and clear wording, such as that of NSF2012, to exclude the SOGA regime if they wish to exclude the satisfactory quality rule.
Compiled by:
Intermodal Research & Valuations | research@intermodal.gr
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
If you believe an article violates your rights or the rights of others, please contact us.
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Friday, 17 January 14
SPOT COAL PRICE TRENDS IN US VARY ACROSS KEY BASINS DURING 2013, SAYS EIA
COALspot.com: Spot steam coal price trends in US varied across key basins in 2013, a latest EIA report says. Compared with 2012, while total coal de ...
Thursday, 16 January 14
PANAMAX : THE GAP BETWEEN SPOT AND PERIOD HAS INCREASED IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic we have seen rates slowly sliding on lack of enough fresh business. USG/Continent still paying excess 28k and seems on an upw ...
Thursday, 16 January 14
SHIP OWNERS SCRAP 1,119 SHIPS DURING 2013 ON THE BACK OF OVERSUPPLY ISSUES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Scrapping of older vessels is still the best bet that ship owners can make, in order to improve their newer vessels' fortunes, amid an oversupply o ...
Wednesday, 15 January 14
KOREA MIDLAND POWER CO INVITES BIDS FOR 360K MT OF SUB-BITUMINOUS COAL FOR ITS BORYEONG PLANT
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 360,000 Metric Tons (MT) of sub-bituminous ...
Wednesday, 15 January 14
CFR SOUTH CHINA COAL SWAPS FALL BY 6.57% MONTH ON MONTH
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 6.57 percept month on month and closed at US$ 78.90 per mt as ...
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- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Wilmar Investment Holdings
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
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